2011 country real estate market - microsoft€¦ · 2011 country real estate market moscow...

2011 COUNTRY REAL ESTATE MARKET Moscow

EXECUTIVE SUMMARY• Thecountryrealestatemarketwasdevelopinggraduallyduring2011.Theaveragepriceonthe

primarymarket(newbuilds)hasreached$4,300persqm,havingrisenby8%overthisperiod.Onthesecondarymarket(re-sales),theaveragesupplypricehasrecorded$6,100persqm,withamoresignificantannualincreasingof18%.

• Thelevelofdemandcouldbecharacterizedasquitehigh.Atthesametime,thebuyers’interesthassetforarisingtrend:thenumberofrequestshasincreasedtwotimesover2011.Themaindemandhasbeenfocusedonthemostliquidpropertieswithinthepricerangeupto$3,000,000inalreadycompletedcottagesettlementsorthosenearingcompletion.

• Thevolumeofnew-builtpremiumclasssupplyhasbeenmoderatein2011.Thoughasignificantnumberofpremiumclassandbusinessclassprojectswasannounced.Apositivetrendofthelastyearisthatdevelopersstartedtodeveloptheprojectsthathadbeenpreviouslystoppedonthebeginningphase.

OVERVIEW

2011COUNTRY REAL ESTATE MARKETMoscow

2

Key events

• Oneofthemostsignificanteventsinthecountryrealestatemarketin2011wasthedecisionoftheMoscowGovernmenttoextendthebordersofMoscow.Weexpectthepricesofthelandincludedintothenewterritorytoriseinlong-termperspective.

• Also,possibleinclusionofSkolkovointotheMoscowterritorywasannounced.

DuetothistheinterestforSkolkovskoyehighwayhasrisenamongpotentialclients,andthedemandforthislocationisnowincreasing.

• ThepossiblerelocationofgovernmentdepartmentstotheterritoriesnearRublyovo-Uspenskoyehighwaymightincreasethedemandforcountrypropertiesandalsomakeapositiveinfluenceontherentalmarketalongthislocation.

COUNTRY REAL ESTATE MARKET

Andrey SolovyevHeadofCountryHousesDepartment,KnightFrank

"2011 actually showed a moderate growth

of suburban real estate market. We see a

progress in this direction in early 2012:

the number of applications for the purchase

of suburban real estate continues to

increase. Natural constraining factors

for transactions today are the future

elections of the president of the Russian

Federation, as well as the expectation

of a possible European financial and

political crisis.

Knight Frank team is optimistic

about the future. We see the interest of

the developers to be back to projects in

all areas of the Moscow region. This year

Knight Frank will bring to the market

a country village located on Rublevo-

Uspenskoye highway 5 km from Moscow,

and will continue to work on the project

Pavlovo on Novorizhskoe highway, 14 km

from Moscow. Our company also begins

to offer apartments in multistoreyed low

rise houses outside the city.

We are sincerely grateful to our customers

for yet another interesting and effective

year and look forward to continue and

strengthen our mutually beneficial relations

in 2012!"

Annual change

Primary Market Secondary Market

Averagepriceperproperty,includingland($persqm)

+8% +18%

Newsupply -11.6%

Buyersactivity 2times

Source:KnightFrankResearch,2012

Main indicators

Averagepriceperproperty,includingland($persqm)

Primarymarket 4,300

Secondarymarket 6,100

Newsupply,numberofsettlements 38


www.knightfrank.ru

3

Supply

Generally,thevolumeofnew-builtsupplystaysatthelevelof2009-2010,buttheproportionofclassesischanging.Thus,only5%ofthetotalsalesopeningsin2011belongtoprimeclasssegment.Butthequantityofnew-builtprimesettlementsontheprimarymarkethasrisenifcomparedwithpreviousyears.Whilein2009thelargestpartofnew-builtsettlementsbelongedtoeconomyclass,nowbusinessandprimeclassescomprise32%ofthetotalvolumeofsupply.Weexpecttheshareofbusinessandespeciallypremiumclasssettlementstogrowfurtheron.

Abigpartofnew-builtcottagesettlementsissituatedalongNovorizhskoyehighway:salesherewereopenedin15projects.Onlyoneofthesesettlementsbelongstotheprimeclasssegment,therestofthemrefertothebusinessclassandeconomyclass.ThesecondplacefornewsettlementopeningsbelongstoKaluzhskoyehighway:7newcottagesettlements.Kievskoyehighwayisonthethirdplace,followedbyDmitrovskoye,Rublyovo-Uspenskoye,MinskoyeandIlinskoyehighways.28%ofnew-builtsupplybelongstootherlocations.

NewprimeandbusinessclassprojectsonRublyovo-Uspenskoye,Novorizhskoye,DmitrovskoyeandKievskoyehighwayswereannouncedin2011.Inthenearestfuture,oneofthemostactivecountrypropertymarketplayersexceptspecializeddevelopmentcompanies(OPIN,Gletcher,VillagioEstateetc.)willbefinancialstructuressuchas

Sberbank,VTBandothers,thatgotlandsbydebtcommitment.FiveprojectsaretobeexecutedonRublyovo-Uspenskoyehighwayinthenearfuture,whichwillcontributetothevolumeofprimesegmentintotalstock.Newprimeclassprojectswillmostlyberepresentedbycottagesettlementswithmost

liquidobjectsoftoday,i.e.cottagesof200-500sqmonland-plotsof10-20hundredths.

23%

The most of new-built settlements sales openings in 2011 are situated in the Novorizhskoye highway – 38%. Rublyovo-Uspenskoye highway comprises 3% of new-built supply

18%

37%

Novorizhskoye

Kaluzhskoye

Kievskoye

Dmitrovskoye

Source: Knight Frank Research, 2012

28%

Rublyovo-Uspenskoye

Minskoye

Ilinskoye

Others

5%5%

3%3%

3%3%

Class С – economy

Class В – business

Class А – prime


38 cottage settlements opened sales in 2011, 12 of them belong to prime and business class segments Number of settlements with newly opened sales

by period

50

45

40

35

30

25

20

15

10

5

0

2008 2009 2010 2011

2011COUNTRY REAL ESTATE MARKETMoscow

4

Demand

Generally,buyers’interestindextrendremainspositivewithseasonaladjustments.TheindexkeptrisingthroughSeptember-OctoberbuttraditionallydecreasedbytheendoftheQ4becauseofdecreaseofbuyers’activityduringseasonalholidays.TheindexreacheditsmaximuminOctober2011,havingexceededthepreviousmaximumofJune2011by6%.

Asforthepremiumclassmarketofthehighestquality(classA:cottagesettlementsofthehighestpricessegmentlocatedonRublyovo-Uspenskoye,Novorizhskoye,andMinskoyehighways,notfartherthan25kmfromMKAD(MoscowRingRoad),withhighly-developedinfrastructure),theleadingroleforthevolumeoftransactionsbelongstoNovorizhskoyehighway:72%ofalltransactions.Suchleveloftransactionsisduetothehighestconcentrationofprimeclasspropertiesalongthisdirection–about83%oftotalvolumeoftheprimarymarketsupplyinthehighestpricesegment.ItisfollowedbyRublyovo-Uspenskoyehighway–19%ofalltransactions.Minskoyehighwaycomprises9%ofprimeclasssegmenttransactionsinthehighestpricesegment.

23%

Demand leader in the prime-class cottage settlements in 2011 was Novorizhskoye highway, where the volume of sold proper-ties was 72% of all highest price range transaction volume

72%

19%

Novorizhskoye

Rublyovo-Uspenskoye

Minskoye


9%

*Index of clients’ requests for country properties. The level of January 2009 is taken as 100


Buyers’ interest index reached its maximum level of 660 points in October 2011. This value exceeds the previous maximum of June 2011points

700

600

500

400

300

200

100

0 jan. 11 feb. 11 mar .11 apr. 11 may 11 june 11 july 11 aug. 11 sept. 11 oct .11 nov. 11 dec. 11

www.knightfrank.ru

5

Commercial terms

Theriseofaveragepriceontheprimarymarketismainlyduetodepletionofcheapersupply,whiletherearelotsofquiteexpensiveprojectsremainingonmarket.Atthesametime,pricegrowthistakingplaceincottagesettlementswheredevelopmentreachesitsfinalstages.Theaveragepriceontheprimarymarketreached$4,300persqm,thatis8%higherthanitwasintheendof2010.Thesecondarymarketshowsevenbiggerriseofaverageprices:18%peryearwiththevalueof$6,100persqm.

Forecast

Thefurthercountryrealestatemarketdevelopmentdependsonthefollowingfactors:

• Politicalrisks

• Economicinstabilityrisk,thatmaycause:

∙ Financingunavailabilityfordevelopers;

∙ Limitedfinancingforbuyers.

Thesefactorsmaycause,ontheonehand,decreasingofsupplyandasaresultcorrectionofaverageprices,andontheotherhand–decreasingofdevelopers’activityanddecreasingofnew-builtsupply.

Nevertheless,themostprobabledevelopmentscenarioofcountryhousemarketaccordingtoourforecastisslowrise.Increasingofbuyers’interestforprimeclassobjects,riseoftransactionvolumeinhigh-qualitysettlementsandriseofpotentialprojectsannouncedtofurtherexecutiontestifyinfavorofthisforecast.


Primary market


2011 saw an increase of prices both on the primary and secondary markets of Moscow Region’s country real estate . On the primary market, the rise was 8%, while on the secondary market the rise was more significant – 18% $ per sq m

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011

Secondary market

Possible development scenario

Probability

Explosivegrowth 10%

Slowrise 45%

Stagnation 25%

Sharpcorrection 20%


OVERVIEW

Europe

Austria

Belgium

CrechRepublic

France

Germany

Ireland

Italy

Monaco

Poland

Portugal

Romania

Russia

Spain

Switzerland

TheNetherlands

UK

Ukraine

Africa

Botswana

Kenya

Malawi

Nigeria

Tanzania

Uganda

Zimbabwe

Zambia

SouthAfrica

Middle East

Bahrain

UAE

Asia Pacific

Australia

Cambodia

China

India

Indonesia

Malaysia

NewZealand

Singapore

SouthKorea

Thailand

Vietnam

Americas & Canada

Bermuda

Caribbean

Canada

USA

Office Real [email protected]

Warehouse Real Estate, landViacheslavKholopovDirectorviacheslav.kholopov@ru.knightfrank.com

Retail Real EstateSergeyGipshRegionalRetailDirector,[email protected]

Residential Real [email protected]

International Investments [email protected]

Professional Consulting ServicesKonstantinRomanovPartner,[email protected]

Financial Markets and InvestingEvgeniySemyonovPartner,[email protected]

Valuation [email protected]

Marketing, PR, Market Research, HRMariaKotovaPartner,[email protected]

Business [email protected]

Saint PetersburgNikolaiPashkovGeneralDirectornikolai.pashkov@ru.knightfrank.com

KyivYaroslavaChapkoBusinessDevelopmentDirectoryaroslava.chapko@ua.knightfrank.com

EstablishedinLondonmorethanacenturyago,KnightFrankistherenownedleaderoftheinternationalrealestate

market.TogetherwithNewmarkCompany,KnightFrank’sstrategicpartner,thecompanyencompasses244officesin

43countriesacrosssixcontinents.

KnightFrankhasbeenasymbolofprofessionalismfortensofthousandsofclientsallovertheworldfor116years.

After16years,KnightFrankhasbecometheleadingcompanyinthecommercial,warehouse,retailandresidential

realestatesegmentsoftheRussianrealestatemarket.Morethan500largeRussianandinternationalcompaniesin

Russiahavealreadymadeuseofthecompany’sservices.

ThisandotherKnightFrankoverviewscanbefoundonthecompanywebsitewww.knightfrank.ru

© Knight Frank 2012

Thisoverviewispublishedforgeneralinformationonly.Althoughhighstandardshavebeenusedinthepreparationoftheinformation,analysis,

viewandprojectionspresentedinthisreport,nolegalresponsibilitycanbeacceptedbyKnightFrankResearchorKnightFrankforanylossor

damageresultantfromthecontentsofthisdocument.Asageneralreport,thismaterialdoesnotnecessarilyrepresenttheviewofKnightFrankin

relationtoparticularpropertiesorprojects.

ReproductionofthisreportinwholeorinpartisallowedwithproperreferencetoKnightFrank.

MOSCOW

Russia,119021,11TimuraFrunzeStr.Phone:+7(495)9810000Fax:+7(495)9810011

ST.PETERSBURG

Russia,191025,3BMayakovskogoStr.Phone:+7(812)3632222Fax:+7(812)3632223

KYIV

Ukraine,04071,39-41HoryvaStr.Phone:+380(44)5456122Fax:+380(44)5456122

2011 country real estate market - microsoft€¦ · 2011 country real estate market moscow...

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